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122 terms

Legal Environment of Buisness

True or false: In mediation, a court assigns the mediator.
TransCorp, Inc., and UniShip, Inc., agree to a contract that includes an arbitration clause. If a dispute arises, a court having jurisdiction may
order a party to submit to arbitration.
True or False: In early neutral case evaluation, a third party's evaluation of each party's strengths and weaknesses forms the basis for negotiating a settlemen
True or False:
The award in court-annexed arbitration is always binding on the parties.
True or False: A forum-selection clause in a contract designates which nation's law will be applied to any dispute
True or False: Stare decisis is a doctrine obligating judges to help persons who have failed to protect their own rights.
3D HD TV Company, a firm in Minnesota, advertises on the Web. A court in North Dakota would be most likely to exercise jurisdiction over 3D HD if the firm
conducted substantial business with North Dakota residents through its Web site.
True or False: A justiciable controversy is a case in which the court's decision¾the "justice" that will be served¾will be controversial.
True or False: A deposition is sworn testimony by a party to a lawsuit or any witness.
True or False: Minimum contacts with a jurisdiction can be sufficient to support jurisdiction over a nonresident defendant.
True or False: Independent regulatory agencies include the cabinet departments of the executive branch.
Labor Recruiters, Inc., has been ordered to appear at a hearing before an administrative law judge of the National Labor Relations Board. A significant difference between a trial and an administrative hearing is that
hearsay can be introduced as evidence in an administrative hearing.
Plastix Produx Company is subject to a decision by the Consumer Product Safety Commission. Opposed to the decision, Plastix Produx wants a court to review it. First, however, the firm must use all of the potential administrative remedies. This is
the exhaustion doctrine.
True or False: Business ethics focuses on ethical behavior in the business world.
Halley, a lawyer on the staff of International Group, applies the utilitarian theory of ethics in business contexts. Utilitarianism focuses on
the consequences of an action.
True or False: Restricting the bonuses that are paid to executives is unethical
True or False: A default judgment is entered against a party who fails to respond to the allegations in a complaint.
True or False: A business firm may have to comply with the laws of any jurisdiction in which it actively targets customers for its products.
True or False: A closing argument is a statement by a party that results in a summary judgment in that party's favor.
True or False: Law enforcement officials can track the e-mail communications of one party to find out the identities of other parties.
Reusable Energy Corporation regularly expresses opinions on political issues. Under the First Amendment, corporate political speech is
True or False: Whether the federal government has preempted a certain area is always clear.
True or False: Some constitutional protections apply to business entities.
A Massachusetts state statute imposes a prison term, without a trial, on all street entertainers who operate in certain areas. A court would likely review this statute under the principles of
procedural due process.
True or False: Discovery is the process of obtaining information from an apposing party before trial.
True or False: Courts do not depart from precedents.
In a suit against Corbin, Donatella obtains damages. This is
a payment of money or property as compensation.
True or False: Constitutional law includes only the U.S. Constitution.
In a suit against Evan, Floyd obtains an injunction. This is
an order to do or to refrain from doing a particular act.
In an action against Elin, Frank obtains a remedy. This is
the legal means to recover a right or to redress a wrong.
True or False: A state constitution is supreme within the state's borders.
True or False: A petitioner is the party against whom an appeal is taken.
Riley, a Sterling Bank employee, deposits into his account checks that are given to him by bank customers to deposit into their accounts. This is
True or False: A defendant may be relieved of liability by showing that a criminal act was necessary to prevent an even greater harm.
Jean sends e-mail to Irwin promising a percentage of the amount in an African bank account for assistance in transferring the funds to a U.S. bank account. Irwin forwards his account number, but the funds are never sent. Instead, Jean quickly withdraws the funds in Irwin's account. This is
Online Fraud
True or False: Ordinarily, "ignorance of the law is an excuse," or a valid defense to criminal liability.
True or False: Picking pockets is not robbery
Oakley posts a defamatory remark about Pierre in "Roominate," an online social network maintained by SocNet, Inc., an Internet service provider. Most likely to be held liable for the remark is
True or False: A person assumes all risks associated with any activity in which he or she participates
Clyde enters Desert Decathlon, an athletic competition in which Clyde has often competed. Regarding the risk of injury, Clyde assumes the risks
normally associated with the Decathlon
True or False: Disparagement of property is another term for appropriation
True or False: Under the "danger invites rescue" doctrine, a person who tries to rescue another individual from harm is liable for any injuries to the individual
True or False: The simplest way for a U.S. firm to do business in a foreign market is to export its products directly to that market.
True or False: Firms overseas have almost total legal protection against government acts in the countries in which they operate, under the act of state doctrine.
True or False: Few nations have restrictions on imports.
True or False: Confiscating property without compensation does not normally violate principles of international law.
True or False:
Restrictions on imports may include quotas.
True or False: The duty owed under the mitigation of damages doctrine depends on the nature of the contract.
True or False: Special damages are awarded for damage caused by special circumstances beyond a contract.
Mutual Company enters into a contract to employ Neil as an investment manager for two years. During the first year, Neil is often absent without explanation and when present fails to adequately monitor and manage Mutual's investments.

Refer to Fact Pattern 10-1A. Neil's performance is most likely
a material breach
Dondi contracts to buy a custom espresso maker from Caffee Specialties, Inc., for $4,500, but Caffee fails to deliver. Dondi buys the appliance elsewhere for $5,500. Dondi's measure of damages is
$1,000 plus incidental damages
True or False: In most contracts, promises of performance are not expressly conditioned.
True or False: Parties are not usually free to bargain as they wish.
Tomato Farms (TF) offers to sell Unified Grocers, Inc., a boxcar load of tomatoes. The offer is sent via overnight delivery because an acceptance is required urgently. It would be most reasonable for Unified to accept via
a fax sent to TF as soon as the offer is received
Phil agrees to work for Vacation Resorts, Inc., as a chef. In determining whether a contract has been formed, an element of prime importance is
the parties' intent
True or False: A contract is void if one of the parties was intoxicated at the time of its formation.
When Jeff's car breaks down, he asks Kwik Tow, Inc., to tow it from its location to Lou's Repair Shop. There is no discussion of a price, and Jeff and Kwik do not sign any documents. After the tow, Kwik sends Jeff a bill. With respect to Jeff's obligation to pay the bill, this is
an implied contract
True or False: If performance is commercially impracticable, the perfect tender rule no longer applies
Overseas Corporation (OC), a U.S. firm, orally agrees to sell six freezers to Pisa Pizza, Ltd., in Italy. OC fails to deliver. Under the CISG, Pisa Pizza can
enforce the agreement
Fresh Harvest, Inc., agrees to sell to Gina's Bed & Breakfast Inn a certain amount of locally grown produce each week but no mention is made of where the goods are to be delivered. In general, the UCC requires that the delivery take place at
Fresh Harvest's place of business
True or False: A seller has an insurable interest in goods as long as the goods are in existence
Rachel enters into a contract with State University over the Internet to take an online course titled "Online Law." This is an e-contract because
the contract was formed online
True or False: A partner always has the power and the right to dissociate from the partnership
Savannah and Rex agree while talking on the phone to form a partnership to deal in sales of natural gas. Their partnership agreement is legally binding
only if the agreement is reduced to writing
In-Home Maid Service Company uses a Web site to provide downloadable information to prospective franchises. This online information is the equivalent of an offer that must comply with
the Federal Trade Commission's Franchise Rule
True or False: Laws governing franchising are designed in part to prevent franchisors from terminating franchises without good cause
True or False: Good faith and fair dealing are not important in terminating a franchise relationship
True or False: An agency coupled with an interest is an agency created for the agent's benefit
True or False: A principal owes his or her agent a duty to act in good faith
True or False: An agent has the implied authority to do what is reasonably necessary to carry out express authority
Elin, an agent for First Credit Corporation (FC), enters into an unauthorized contract with Great Expectations, Inc. (GE), purportedly on FC's behalf. This contract will be enforceable if it is ratified by
True or False: An agreement to form an agency relationship can be oral
Rockstar Software, Inc., develops a new series of performance-related video games. The games are most likely protected by
copyright law
Felicia invents a new valve to cap undersea oil spills, which she names "Great Catch." She also writes the installation manual to be included with each valve. Felicia could obtain copyright protection for
the installation manual
True or False: Copyright protection is automatic-registration is not required
Sincere Forms, Inc., uses, in its ads, a trademark that is similar, but not identical, to the famous, registered mark of Desired Objects, Inc. Sincere's unauthorized use of the mark constitutes trademark dilution provided
Sincere's use lessens the value of Desired's mark.
Excel Goods, Inc., and Finest Products Corporation use the mark "Good Housekeeping Seal of Approval" to certify the quality of their products. Excel and Finest are not in business together and do not own this mark. The mark is
a certification mark
True or False: A guarantor can be required to pay an obligation only after the principal debtor defaults
True or False:One of the primary effects of a discharge is to relieve the liability of a co-debtor
True or False: The same principles that govern the filing of a liquidation petition apply to reorganization proceedings.
True or False: A bankruptcy estate consists of all the debtor's interests in property currently held, wherever located
To adjust debt and institute a repayment plan, Charlie¾who is not a corporation, a partnership, or a family farmer or fisherman¾may file a petition in bankruptcy for relief through
a repayment plan
Kenton borrows $150,000 from Liberty Home Finance Corporation to buy a home. Federal law concerns primarily
what must be disclosed with respect to a mortgage
Velma borrows $110,000 from Watershed Bank to buy a home. If she fails to make payments on the mortgage, the bank has the right to repossess and auction off the property securing the loan. This is
True or False: In a judicial foreclosure, the lender is allowed to foreclose on and sell the property without judicial supervision
Harbor Bay Bank has made mortgage loans to consumers that qualify for the Home Affordable Modification Program (HAMP), which offers incentives to lenders to change the terms of certain loans. The purpose of HAMP is to
reduce monthly payments to levels that homeowners can pay
True or False: Borrowers are required to recite the terms of their loans in clear, readily understandable language so that lenders can make rational choices.
VeriVisual Company makes HD 3D film and video equipment. VeriVisual is like most corporations in that its officers are hired by the firm's
board of directors.
Ruben is a shareholder of Speed Bikes Company (SBC). When the directors fail to undertake an action to redress a wrong suffered by SBC, Ruben files a suit on the firm's behalf. Any damages recovered by Ruben's suit will normally go to
True or False: Directors are not obligated to refrain from self-dealing.
Sullivan and Taylor want to form a corporation to provide catering services. The first step in the incorporation procedure is to
select a state in which to incorporate
True or False: Officers hire the directors and other executive employees.
Pharma Company, Quitox Corporation, and Renal, Inc., are drug makers. Med Sales Company and National OTC, Inc., are drug distributors. In a suit against all of these parties in which market-share liability is imposed, most likely to be liable are
the distributors and the makers
True or False: An action in strict product liability requires that the defendant fail to exercise reasonable care
True or False: To succeed in a strict product liability suit, an injured plaintiff must show that a product's defect was the proximate cause of the injury
Air Navigation, Inc., makes aviation guidance systems. Ollie is injured in a crash caused by a defective Air Navigation product. A statute restricts the time within which Ollie may file a product liability suit against Air Navigation regardless of when he was injured. This is a statute of
True or False: Most group boycotts are legal
Smoothwater Driftboat Corporation refuses to sell its products to Sportsters Weekend, Inc., a recreational products dealership. This is
A Unilateral Refusal to Deal
True or False: Market share and market concentration are the only factors for analyzing the anticompetitive effects of a merger.
Seaside Cannery, Inc., is one of many producers of canned seafood. Seaside refuses to sell its products to Troll Harbor Restaurant Corporation. This refusal is most likely
not a violation of antitrust law.
Penny Stock Company faxes ads to Quality Personnel Corporation and other businesses without the recipients' permission. This is
True or False: Federal laws often provide more sweeping and significant protections for the consumer than state laws.
Sweet Treats, Inc., wants to market a new snack food. On the product's label, standard nutrition facts are
Green Grocer Corporation makes and markets a variety of processed food products. The federal agency responsible for enforcing health regulations concerning food is
the Food and Drug Administration.
ChemoCorp, Inc., makes and sells pesticides. If a substance is identified as harmful and the harm is imminent, the Environmental Protection Agency can
conduct an inspection of ChemoCorp's plant.
Metro City operates its own municipal public drinking water system for which the Environmental Protection Agency has set maximum levels of pollutants. Metro does not use any equipment to meet these standards. With regard to any contamination of the water, under the Safe Drinking Water Act, this is most likely
a violation
True or False: The Clean Water Act includes special provisions for toxic chemicals and for oil spills.
Metal Smelting, Inc., operates a plant¾a "major source"¾that emits hazardous air pollutants for which the Environmental Protection Agency has set maximum levels of emission. The plant does not use any equipment to reduce its emissions. Under the Clean Air Act, this is most likely
a violation
True or False: In a situation involving a price-fixing agreement, normally each competitor is liable for the total amount of any damages
To drive its competitors out of a certain geographic segment of its market, Fryin' Potatoes, Inc., sets the prices of its products below cost for the buyers in that area. This is
price discrimination
Mango Corporation believes that Melon Corporation engages in anticompetitive behavior in an attempt to drive Mango, its chief competitor, out of the market. Antitrust laws can be enforced against Melon by
Detailed Designs Company, an architectural firm, wants to hire Eduardo, a noncitizen. A temporary work visa is most likely to be set aside for a noncitizen who is
a "person of extraordinary ability.
True or False: After every strike, strikers have a right to return to their jobs
During a union election campaign at Western Hydraulics Company, the union can campaign on Western's property in
non-work areas during non-work time.
True or False: State employers are not immune from private suits brought by employees under the Age Discrimination in Employment Act of 1967.
Pikabo files an employment discrimination suit against Quantitative Analysis, Inc., under the Civil Rights Act of 1964, based on its discharge of Pikabo. Possible relief includes
True or False: When the harassment of co-workers creates a hostile working environment, an employee may have a cause of action against the employer.
Dakota believes that Credit Services Corporation (CSC) has discriminated against her on the basis of gender. She files a suit against CSC under the Civil Rights Act of 1964. To establish a prima facie case of employment discrimination, Dakota must show that
She is a member of a protected class
True or False: Any employee who works more than eight hours per day must be paid overtime.
Lee works as an employee for Maximum Industries, Inc., a private employer. Maximum announces that it will start random drug testing of its employees. If Lee resists this policy, he may look for protection under
a state constitution or statute.
Tedium Accounting Corporation, a private employer, handles bookkeeping for small employers. In most circumstances, with exceptions, federal law clearly prohibits Tedium from subjecting its employees to
Lie detector Tests
Tedium Accounting Corporation, a private employer, handles bookkeeping for small employers. In most circumstances, with exceptions, federal law clearly prohibits Tedium from subjecting its employees to
test its employees for a genetic predisposition to disease.